updated 9/11/2006 11:19:34 AM ET 2006-09-11T15:19:34

Canadian steelmaker Ipsco Inc. said Monday it is buying NS Group Inc., a maker of steel pipes and tubes used in oil fields, for about $1.46 billion in cash.

The $66-per-share price is a 43 percent premium to Newport, Ky.-based NS Group’s Friday closing price of $46.15 on the New York Stock Exchange.

The deal will be used to broaden Ipsco’s energy product offering, Ipsco CEO David Sutherland said.

“This is a transaction that’s all about growth, and if anything, what we will see over the next three years is a growth in the output of all of (NS Group’s) facilities, as well as the continuing demand on our own,” Sutherland said in a conference call Monday morning.

The transaction will be financed with cash on hand and a $750 million term loan, company officials said.

Sutherland said the merger will give Ipsco an opportunity to be a leader in the American energy pipe market.

“Ipsco will increase its ability to service the robust U.S. energy tubular product market from a globally competitive, domestic base, fully consistent with our strategy of increasing value-added products,” he said.

The deal is expected to close by the end of the year, subject to customary closing conditions.

NS Group president Rene J. Robichaud said the merger will allow employees “to be part of a larger enterprise.”

“Ipsco has indicated that it is their intent to build on our exceptional platform and continue to grow the business over the long term,” Robichaud said in a statement.

After the transaction is complete, the new company is expected to have combined annual revenue of more than $4 billion.

Ipsco Inc., based in Regina, Canada, operates three steel mills and six pipe mills in the United States and Canada. It has an annual steel-making capacity of 3.5 million tons.

NS Group produces tube products used primarily in the drilling, exploration and transportation of oil and natural gas.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.79%
$30K home equity loan FICO 5.78%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com